taxes on winnings

[whtyger97]

I just won a laptop on a radio contest. They are sending me the paper work i have to fill out before i can claim it. I was just wondering how taxes on a prize like this work?

 

[jfulcer]

Based on winning a Gift Certificate from a department store, you can almost treat this like a 'earnings' although it's not really. We set aside the same % in taxes we get taken from our paychecks and that covered the hit on our taxes the following year just fine.

As long as you are taking it into consideration, you should be fine. I think you can even ask your employer to take out 'extra' from your checks to cover this in taxes.

 

[ToriLammy]

Another little tidbit of advice cause what Jfulcer said is what I've heard. A lot of time an agency will tend to use the "book" price for an item. They call it the "ARV" or approximate retail value. Because you are filling out an affidative you will receive a 1099 next January and it will probably show the ARV. You can adjust the amount claimed based on FMV - Fair Market Value. So when you get your laptop start looking at flyers from Best Buy, Circuit City etc to see how much they charge for the same laptop and save them for tax season, especially if they are lower than what the agencies' ARV is.

I hope that made sense. PM me if you have any questions. Oh yeah - CONGRATULATIONS! Winning stuff is always fun!